Correlation Between Nano X and DexCom

Can any of the company-specific risk be diversified away by investing in both Nano X and DexCom at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nano X and DexCom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nano X Imaging and DexCom Inc, you can compare the effects of market volatilities on Nano X and DexCom and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nano X with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano X and DexCom.

Diversification Opportunities for Nano X and DexCom

0.34

Correlation Coefficient

Nano X  DexCom

Weak diversification

The 3 months correlation between Nano and DexCom is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nano X Imaging and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Nano X is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nano X Imaging are associated (or correlated) with DexCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DexCom Inc has no effect on the direction of Nano X i.e., Nano X and DexCom go up and down completely randomly.

Pair Corralation between Nano X and DexCom

Given the investment horizon of 90 days Nano X Imaging is expected to under-perform the DexCom. In addition to that, Nano X is 2.33 times more volatile than DexCom Inc. It trades about -0.06 of its total potential returns per unit of risk. DexCom Inc is currently generating about -0.06 per unit of volatility. If you would invest  8,024  in DexCom Inc on December 27, 2024 and sell it today you would lose (811.00) from holding DexCom Inc or give up 10.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nano X Imaging  vs.  DexCom Inc

Nano X Imaging

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nano X Imaging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

DexCom Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days DexCom Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Nano X and DexCom

The main advantage of trading using opposite Nano X and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano X position performs unexpectedly, DexCom can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DexCom will offset losses from the drop in DexCom's long position.

The idea behind Nano X Imaging and DexCom Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.